Facebook has once again come under the line of fire because of accusations of ‘illegally’ acquiring companies that start giving competition to the tech giant. A few months ago, Facebook and other Silicon Valley giants including Google, Apple, and Amazon had to appear before Congress over claims of monopolizing the digital world by dominating every sector of it. Later, Google faced another lawsuit by the US DOJ over the allegations of violating US competition laws and using its power and influence to dominate online internet search engines and online ads. Now, that furor had not died completely that the US regulators from the Federal Trade Commission and prosecutors from 45 states teamed up and filed a lawsuit against Facebook just recently.
The lawsuit mainly focuses on two aspects:
1) Facebook buys the companies that start giving it a threat of competition as it bought a thriving company like Instagram in 2012 and WhatsApp in 2014,
2) Facebook’s monopoly claims remain unsettled.
The US regulators Asking For Facebook’s Breakup
This is one of the demands that the US officials and lawmakers are asking Facebook to do. FTC believes that Facebook has broken some rules related to the outside software developers too along with using the approach of ‘buy or bury’ the competition.
To prove their point, they have an email of Mark Zuckerberg from 2008 in which he said that it is “better to buy than compete.” Later on, in 2012, Facebook did exactly that with a successful company like Instagram, and then in 2014 with WhatsApp.
According to Letitia James, a New York Attorney General, it has been more than ten years that Facebook has used all its power and dominance to crush its competitors. The company basically gets rid of its competition the minute it sniffs there is one. And sadly, all of this has been done at the expense of an average, everyday user. The US officials and FTC now realize that no tech company should get this much-unchecked power over the users’ social and private interactions. This is the main reason why US officials and lawmakers are now trying to take strict action against the company.
Facebook claims that all its previous deals were thoroughly scrutinized and approved by these regulators.
In a way, Facebook is right too as it never proceeded with any dealing without getting approval from the US regulators and authorities. Facebook’s general counsel Jennifer Newstead said that the government is trying to use its power to undo what it had previously approved of and is trying to send a warning to everyone else that no sales should ever be considered final.
Facebook has spent millions of dollars to bring Instagram and WhatsApp to a leading position amongst all the top apps in this digital world today. So, Facebook is not going to surrender in front of the US officials’ demands easily and is going to fight till the end. Jennifer Newstead also said that Antitrust laws are there to protect the consumers and to promote innovative technology, not to punish a business for being successful.
And successful it is! Facebook is not just a normal, mediocre application. More than 2.5 billion people use Facebook and its apps on a daily basis. The company’s net worth is somewhere around $800 billion with massive revenue and above $18 billion in profits only till 2019.
When Facebook bought Instagram for $1 billion, it was a successful company on its own, but there is also denying that its success was not pre-destined, and Facebook did invest a lot in the app to make it one of the most widely used apps all over the world. The same goes for WhatsApp. And Facebook’s argument is valid that are the officials trying to punish the tech firm for growing stronger companies in America?
I’m Ava Paul, an experienced news website author with a special focus on the entertainment section. Over the past five years, I have worked in various positions of media and communication at World Stock Market. My experience has given me extensive knowledge in writing, editing, researching and reporting on stories related to the entertainment industry.
